Dollar General's 2026 Real Estate Plan Focuses on Rural Markets

Dollar General Corporation’s DG real estate growth plan for fiscal 2026 prioritizes expansion into rural America, aiming to strengthen its position as an essential neighborhood partner, with about 21,000 stores located within 5 miles of 75% of the U.S. population. The company plans to execute about 4,730 real estate projects throughout the year. This strategy includes opening about 450 new stores in the United States and 10 additional locations in Mexico.

The majority of these new stores will feature an 8,500-square-foot format and will be located primarily in rural communities. DG has planned 20 relocations in fiscal 2026, primarily into larger 8,500 or 9,500-square-foot formats. These larger formats enable the retailer to offer expanded cooler sections and a wider selection of health and beauty products to underserved populations.

About 80% of the existing store base serves towns with populations of 20,000 or fewer. Management estimates there are about 11,000 additional opportunities for store expansion nationwide. In addition to new builds, the 2026 plan includes 2,000 Project Renovate remodels and 2,250 Project Elevate remodels to modernize the existing store base. The company also plans to introduce fresh produce to more than 200 additional stores during fiscal 2026. 

Management stated that new stores are expected to achieve cash payback in about two years and deliver average financial returns between 16% and 17%. This focused real estate approach establishes the company as an essential partner for rural residents.

What the Latest Metrics Say About Dollar General

Dollar General, which competes with Costco Wholesale Corporation COST and Target Corporation TGT, has seen its shares rise 90.6% over the past year compared with the industry’s 10.3% growth. Shares of Costco and Target have dropped 5% and 9.5%, respectively, in the aforementioned period.
 

From a valuation standpoint, Dollar General's forward 12-month price-to-earnings ratio stands at 21.11, below the industry’s 33.34. DG carries a Value Score of B. Dollar General is trading at a premium to Target (with a forward 12-month P/E ratio of 14.96) but at a discount to Costco (46.75).
 

The Zacks Consensus Estimate for Dollar General's current financial-year sales and earnings per share implies year-over-year growth of 4.8% and 9.6%, respectively. For the next fiscal year, the consensus estimate indicates a 4.1% and 9.2% rise in sales and earnings, respectively.

Dollar General currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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